Experts warn that the inflationary shock is waiting for Russia in January
The CBR believed that the adjustment to the VAT increase will take two to three months, because of this, in the first quarter of 2019, there may be a resurgence of inflation. In the first quarter, annual inflation will be above 5%. By the end of 2019 inflation, according to Bank of Russia, should be around 5% -5.5% of.
We broadly agree with the opinion of the Central Bank of the Russian Federation, highlighting the following inflationary factors – growth in gasoline prices and expectations of devaluation of the ruble. The latter lead to growth of velocity of money and, consequently, to higher prices. It is possible to bring down a wave of inflation, the Bank of Russia will raise its key rate, now it is 7.5%, our target of 8%.
This decision will definitely please the depositors of commercial banks: it will be possible to expect further growth of interest rates on deposits. Thus, from our point of view, the best anti-inflationary factor was the policy of the strong ruble. It would include not only the refusal from the purchase of foreign currency in reserves, but the translation of the main exporters of their foreign currency assets into roubles. For example, the cash cushion “Surgutneftegaz” is about $44 billion.
So in conclusion, the official inflation rate is often criticized: some citizens believe that real inflation is much higher than the official. And that doesn’t always mean that citizens can’t count. Economic theory teaches that inflation is a tax on the poor. To the more vulnerable it is much higher.
The Director of analytical Department,